Three Lessons on Crisis Management

Crisis management can be a complex endeavor. But there are a few common lessons I have learned that have helped me handle various crisis situations. Whether you’re a business executive or a professional communicator, I hope these tips help you.

LuckWhen it comes to the public’s awareness of a crisis, the elephant in the room is luck. Depending on other events occupying the attention of the media or public, a crisis may not get much awareness. That’s great – lucky you! But when you have a crisis creep up on a slow news day, you could be in big trouble.

The lesson learned: Rarely can you control timing, so be ready for the worst possible scenario.

Self-inflicted crisisA year or so ago, Netflix created a self-inflicted crisis – and then made it worse. Netflix separated its video streaming and DVD delivery plans and increased pricing not only once, by two times. In making these changes, Netflix didn’t take into account its buyers, and all of its customer communications were couched on behalf of or in the perspective of the company. So, customers were furious and thousands cancelled their subscriptions. The value of the company fell 70 percent.

The lesson learned: Think like your customer and communicate customer concerns first. Without them, you have no revenue – and thus, no company.

Successful crisis managementThe most successful crisis management is when the problem never surfaces to the public or media. But prepared companies and organizations don’t rely on this. Instead, they move quickly and appropriately to fix the problem, communicate to required audiences, make adjustments going forward and minimize future issues of the same type.

The lesson learned: Know your vulnerabilities, have a plan in place, and make sure you have an intelligence-gathering capability and well-trained crisis team on alert. Don’t rely on luck.

Pierpont’s executive counsel Terry Hemeyer has handled hundreds of crisis situations and has been teaching crisis management to Rice University MBA students and at the University of Texas at Austin for the past 16 years.

Texas Enterprise is an online publication whose goal is to share the business and public policy knowledge created at The University of Texas at Austin with Texas and with the world.